The rising sun lights the Empire State Building as it stands over the Manhattan borough of New York, U.S.,November 2, 2016.
Reuters/Lucas Jackson
Land sales in Manhattan ground to a halt last year with just under $3 billion worth of transactions in 2016, down 74 percent from the previous year.

Cushman & Wakefield data show the number of transactions fell off by nearly 40 percent. Banks have become wary about financing land acquisitions and construction amid concerns about an oversupply of residential units in the borough, especially for high-end luxury condominiums.

One thing Cushman’s data, which was cited by Crain’s, doesn’t show is a drop-off in pricing. Bob Knakal, chair of the brokerage’s New York investment sales group, said that’s because among the relatively fewer transactions that closed last year, sellers were able to achieve top dollar for their properties.

“The fewer deals that did get done were at healthy prices because the seller got the number they were looking for,” Knakal said. “It disguises the fact that overall land values have dropped.”

Knakal said future closings will reflect a drop in values. Land that may have traded for $800 per square foot a year ago, for example, are now valued at about $600 per square foot, or roughly 25 percent cheaper.

“It takes a while, a year to 18 months, before sellers get used to the new reality and begin selling at the new market prices,” Knakal said. [Crain’s]